Tata Sons has ordered its group companies to scrap all business dealings with Cyrus and Shapoor Mistry's SP Group, putting transactions worth millions of rupees at risk. As many as 50 companies will be affected by the decision taken by Tata Sons board under N Chandrasekaran. Cyrus and elder brother Shapoor Mistry each own half of the privately-owned SP Group. A top Tata source said the decision to terminate all forms of business dealings, whether directly or indirectly, through contracts or sub-contracting arrangements, with the SP Group came after “disparaging” statements made against Tata Sons by Cyrus Mistry and his associates, with the intention of casting a “negative light” on the company.
The directive is sent to all group companies, including Tata Steel, Tata Power, Tata Chemicals and Tata Motors. Smaller group firms such as Voltas and Trent, which is chaired by Noel Tata, half-brother to Ratan Tata and brother-in-law of the Mistry brothers, have also received the order. All group companies are reportedly acting on the directive. “As the promoter and principal shareholder of your company and as the custodian of the 'Tata' brand, Tata Sons does not support any business dealing in any form, whether directly or indirectly, through contracts or sub-contracting arrangements,” the directive, signed by CEO of Tata Sons FN Subedar, said.
It said that Mistry has been aided and supported by the SP Group in his “hostile approach” to the Tata Group. SP Group holds about 18.4% in Tata Sons. It remains to be seen whether the Mistrys will file a legal case. The directive states that certain SP Group companies have presented an “incorrect and distorted version of facts” pertaining to the business and affairs of Tata Sons, to the National Company Law Tribunal.
